+------------------------------------------------------------------------------+
Li Ka-shing's Group in $9.1 Billion Bid to Buy EDF's U.K. Unit
2010-07-30 05:20:46.427 GMT
By John Duce
July 30 (Bloomberg) -- A group led by Hong Kong
billionaire Li Ka-shing's Cheung Kong Infrastructure Holdings
Ltd. has offered to buy Electricite de France SA's U.K. power
networks unit for 5.8 billion pounds ($9.1 billion).
Cheung Kong Infrastructure, subsidiary Hongkong Electric
Holdings Ltd. and the Li Ka-shing Foundation have jointly bid to
buy the assets, according to a filing to the Hong Kong stock
exchange today. The offer is subject to formal approval by
the seller and the Commission of the European Union, it said.
The utilities and roads company said in May it is on EDF's
shortlist of bidders for three U.K. networks. Cheung Kong
Infrastructure has invested in gas, water and road assets in
Australia, Canada and the U.K. to counter slowing growth in Hong
Kong's power market. The company said last year it has a HK$10
billion ($1.3 billion) "war chest" for acquisitions and is in
talks to buy more than 10 projects in North America and Europe.
"The company is looking for sizeable assets overseas with
good returns," said Gary Chiu, an analyst at HSBC Securities
Asia Ltd. in Hong Kong. "The U.K. has a good regulatory
environment and stable earnings."
The Financial Times had earlier reported Cheung Kong
Infrastructure had won the deal.
Li, 82, is Hong Kong's richest man and was estimated to be
worth $16.2 billion by a Forbes magazine survey in March 2009.
He is dubbed "Superman" by Hong Kong's media because of
his track record for investing and correctly predicted in 2007
that China's stock market was in a "bubble."
Trading Halt
Cheung Kong Infrastructure had earlier asked for trading in
its shares to be halted today ahead of an announcement of a
"price sensitive" transaction. The stock has fallen 2.2
percent this year compared with a 4.4 percent decline in the
benchmark Hang Seng Index.
EDF's U.K. assets have a value of about 4 billion pounds,
Cheung Kong Infrastructure Chief Operating Officer Andrew Hunter
said on March 4, adding that's not necessarily the size of the
company's bid.
The company yesterday reported a 48 percent drop in first-
half net income HK$2.03 billion after making a one-off gain last
year selling assets.
Paris-based EDF, Europe's biggest power producer, got at
least two preliminary bids from the Hong Kong company and a
group led by Australia's Macquarie Group Ltd., a person familiar
with the matter said July 16. Deutsche Bank AG and Barclays Plc
were advising EDF on the sale.
EDF Assets
Macquarie partnered Abu Dhabi Investment Authority
and the Canadian Pension Plan. The group was advised by
Goldman Sachs Group Inc., Lexicon Partners and Macquarie Capital
Advisers. Cheung Kong Infrastructure was advised by RBS
Corporate Finance, a unit of Royal Bank of Scotland Group Plc.
EDF Chief Executive Officer Henri Proglio wanted to sell
the network to help reduce debt after the nuclear power utility
expanded into the U.K. with the purchase of British Energy Group
Plc in 2008. The company needs to invest billions of euros at
home to maintain France's 58 atomic reactors.
EDF's U.K. network serves about 7.8 million people in
London and southeast England. It includes about 170,000
kilometers (105,633 miles) of underground cables and overhead
power lines, as well as 66,300 substations, according to the
company's website. EDF valued the regulated part of network at
about 4 billion euros ($5.1 billion) at the end of 2008.
Cheung Kong Infrastructure's assets overseas include a
stake in the U.K. energy company Northern Gas Networks Ltd. In
April, the company agreed to pay 211.7 million pounds for a
stake in the U.K. electricity producer Seabank Power Ltd. from
BG Group Plc.
About two-thirds of Cheung Kong Infrastructure's revenue
was generated by its overseas businesses last year, according to
data compiled by Bloomberg.
Story link: {NSN L6CDXN6MBOQP <GO>}
For Related News and Information:
Top energy stories: ETOP <GO>
Top stories on China: TOP CHINA <GO>
China Energy Data: ENST CHINA <GO>
--Editors: Amit Prakash.
To contact the reporter on this story:
John Duce in Hong Kong at +852-2977-2237 or
Jduce1@bloomberg.net
To contact the editor responsible for this story:
Amit Prakash at +65-6212-1167 or aprakash1@bloomberg.net
